Tuesday, May 16, 2017

Headline of the campaign

The Economist magazine has come up with the headline of the campaign about Labour’s economic programme, referring to the borrowing the Shadow Chancellor would have to do if by some dire calamity Labour were elected.

"Old McDonnell has a plan. He eyes IOUs."

You can read the article which has this magnificent headline here.

2 comments:

Jim said...

For a long time now I have been stating that the books need to balance, the government should be spending less lot more, and that the tax take needs to increase, which is oddly not the same thing as raising certain taxes.

So, to me, to launch a manifesto stating how "we will spend much more, and pay for it by raising certain taxes, and borrowing" well its like waving a red rag to a bull and wondering why it strikes at you

Chris Whiteside said...

Labour's manifesto is the economics of the madhouse and I think even Corbyn and McDonnell realise it.

I suspect they have lost all hope of winning and are trying to limit the sale of the defeat by promising all sorts of things which appeal to their potential voters - but the idea that the country could possibly afford to pay for it would be a nonsense even if they had costed it properly, which they have not.

They would never get the extra tax revenue they are forecasting because the increased taxes they propose would drive people and business abroad and greatly reduce economic activity and the tax base.

Punitive taxation never raises more money - there is some room for argument about the exact shape of the "Laffer Curve" which relates tax rates to total tax revenue but little doubt that showing tax rates up to the levels proposed in the Labour manifesto will generate less revenue, not more.